US And Australia Sign Open Skies Accord

by Leroy Baker, Tax-News.com, New York

15 February 2008

US Secretary of Transportation Mary E. Peters announced on Thursday that the United States and Australia have concluded a landmark Open-Skies aviation agreement that will eliminate restrictions on US-Australia air services for the carriers of both countries.

The agreement came after three days of negotiations in Washington.

“This agreement will strengthen the already close ties between the United States and Australia,” commented Peters. “Today’s agreement begins a new era where American and Australian consumers, airlines and economies can enjoy the benefits of lower fares and more convenient service.”

Under the new agreement, airlines from both countries will be allowed to select routes and destinations based on consumer demand, without limitations on the number of US or Australian carriers that can fly between the two countries, or the number of flights they can operate. The agreement also removes restrictions on capacity and pricing, and provides opportunities for cooperative marketing arrangements, including code-sharing, between US and Australian carriers.

Although the 1946 US-Australia aviation agreement was significantly amended in the 1980s, it still contained restrictions on capacity, routing, pricing and code-sharing, and there was no provision for charter flights. In 1999, the two countries took a major step toward liberalizing air services when they agreed to remove restrictions on US-Australia air cargo services.

With this agreement, Australia becomes the 90th US Open-Skies partner. The two sides will abide by the terms of the agreement, pending its formal signing.

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